screenshot:

Solution: remove/rename the software update status config file

mv /etc/applmgmt/appliance/software_update_state.conf /etc/applmgmt/appliance/software_update_state.conf.bak

On a side note: I ran into the issue after attempting to “stage and install” my homelabs vcsa,
logs reveal:

/var/log/vmware/applmgmt/applmgmt.log
2021-05-30T15:20:26.108 [3758]DEBUG:vmware.appliance.update.update_functions:Removing the mount point /mnt/iso-contents
2021-05-30T15:20:26.109 [3758]INFO:vmware.appliance.update.update_functions:ISO unmounted successfully
2021-05-30T15:20:26.109 [3758]DEBUG:vmware.appliance.update.update_b2b:discoverLocalUpdate failed.
Traceback (most recent call last):
  File "/usr/lib/applmgmt/update/py/vmware/appliance/update/update_b2b.py", line 1434, in _discoverUpdateAt
    tempFolder)
  File "/usr/lib/python3.7/shutil.py", line 248, in copy
    copyfile(src, dst, follow_symlinks=follow_symlinks)
  File "/usr/lib/python3.7/shutil.py", line 120, in copyfile
    with open(src, 'rb') as fsrc:
FileNotFoundError: [Errno 2] No such file or directory: '/mnt/iso-contents/manifest-latest.xml'

During handling of the above exception, another exception occurred:

Traceback (most recent call last):
  File "/usr/lib/applmgmt/update/py/vmware/appliance/update/update_b2b.py", line 1640, in discoverLocalUpdatesNoException
    _discoverLocalUpdates()
  File "/usr/lib/applmgmt/update/py/vmware/appliance/update/update_b2b.py", line 1631, in _discoverLocalUpdates
    _discoverUpdateAtIso()
  File "/usr/lib/applmgmt/update/py/vmware/appliance/update/update_b2b.py", line 1607, in _discoverUpdateAtIso
    raise e
  File "/usr/lib/applmgmt/update/py/vmware/appliance/update/update_b2b.py", line 1602, in _discoverUpdateAtIso
    _discoverUpdateAt(manifestDir, packagesDir, copyFileFunc, 'iso')
  File "/usr/lib/applmgmt/update/py/vmware/appliance/update/update_b2b.py", line 1446, in _discoverUpdateAt
    raise RpmManifestNotFoundException
vmware.appliance.update.update_b2b.RpmManifestNotFoundException

so, I did the above, staged the upgrade repository this time:

Then ran the install:


Progress:

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